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Monday, June 3, 2024

Currency devaluation has jeopardized the Telecom industry

Pakistan’s telecom sector has criticized the government for fixing telecom license renewal to the US dollar.

The industry has raised its concerns over the payment of license fees and interest in installments in US dollars, describing it as the biggest threat to the information and communications technology industry. It has demanded the government to revisit its policy and declared that currency devaluation had jeopardized its business plan.

Various telecom players have protested against the policy and said that it has risked the industry’s vision of Digitalization of Pakistan. They were concerned about the increasing cost of business due to constant devaluation of the local currency against the US dollar. Moreover, the expectation from the industry to invest in infrastructure and modernization is becoming detrimental to the dream of digital Pakistan, amidst currency devaluation.

Read more: Rupee plunges to Rs 271.35 against US dollar

Views of Telecom industry on the new policy: 

In addition to forwarding their concerns to relevant government quarters, the heads of Jazz, Telenor Pakistan, and Ufone have posted their concerns on Twitter over the new government policy. They asserted that the supposed inaction of the government against ongoing economic crises will largely hit the IT and telecom sectors.

The CEO of Jazz, Aamir Ibrahim tweeted;

“Last year, 50 percent license renewal fee cost us Rs44.5 billion and this year just 10 percent installments alone costs over Rs13 billion”

He further added;

“Due to ongoing currency devaluation, we’re unable to determine the amount we’ve to pay in installments next year adding to uncertainty that no business plan can withstand. Sadly, the wrong policy of pegging telecom license price to $ [dollar] pushing us from digital emergency to digital catastrophe”

Likewise, the CEO of Telenor, Irfan Wahab was of the view that;

“Need to fix this mismatch before telecoms capacity to further power digital transformation gets irrevocably depleted.”

Additionally, Hatem Bamatraf, owner of Ufone Company said in a statement;

“The expectation from telcos to invest heavily in infrastructure modernization while earning in rupees is becoming detrimental to the dream of Digital Pakistan. We must act now and devise a strategy for regulatory relief to avoid slowing down the digital development of the country.”

The devaluation has almost made it impossible for the telecom companies to proceed with their business plans and deliver up to mark this year.